How much does the Maltese worker fork out in taxes compared to the EU?

Taxes vary across the European Union significantly. In 2023, a single average worker without children in the bloc had an average gross earning of €41,004, with €7,075 deducted in income tax, coming in at 17.3 per cent of gross wages. The proportion of tax varied widely, from  3.2 per cent in Cyprus to 36 per cent in Denmark. Malta came in below EU average at 15 per cent. 

Malta’s average annual earnings, akin to other Southern Mediterranean countries, were lower than EU average, coming in at €27,232 gross but paid lower taxes on it when compared to the “Big Four”, and Nordic states.

A recent Euronews report sheds light on the portion of gross salaries that European workers contribute to taxes and social security. While the figures vary significantly from country to country, Malta’s position within this landscape presents a unique balance between taxation and take-home pay.  

Malta in the European Tax Context  

Across Europe, tax burdens on salaries range from relatively low in countries like Ireland and Switzerland to much higher in nations such as Belgium, Germany and France. According to Eurostat data, the average European worker coughs up around 40-45 per cent of their gross salary to taxes and social security, though this fluctuates based on income brackets and national tax structures.  

Malta, however, follows a different model. The country operates on a progressive tax system, with income tax rates ranging from 0 per cent (for those earning under €9,100 annually) to 35 per cent for higher earners (over €60,000 per year). Social security contributions are capped at a fixed rate of 10 per cent from both employees and employers, making Malta’s system relatively straightforward compared to the complex deductions in other EU states.  

Source: Euronews

How Much of a Salary Goes to Taxes in Malta?

For a typical full-time worker in Malta, income tax and social security deductions combined range between 20 and 30 per cent of gross salary — placing Malta among the lower-taxed countries in Europe. This contrasts with Belgium or Germany, where total deductions can exceed 50 per cent for high earners.  

The impact of taxation is also felt in the overall cost of living and social benefits. Countries with higher tax burdens often provide more extensive public services, such as universal healthcare, solid pension schemes, and generous unemployment benefits. Malta, while maintaining a relatively lower tax burden, still offers free healthcare and education but has more limited social security benefits compared to Nordic countries or France.  

A Double-Edged Sword? 

Malta’s lower tax rates may be attractive for workers and businesses, but they also raise questions about long-term sustainability. With an ageing population and increasing demands on public services, experts often debate whether the country can maintain its relatively low taxation model without increasing contributions or adjusting social benefits in the future.  

For workers in Malta, however, the current system strikes a balance — offering one of the lowest tax burdens in Europe while maintaining a decent level of public services. As tax policies evolve across Europe, Malta’s approach will remain a point of interest, particularly for professionals and businesses comparing the island to higher-taxed economies on the continent.